Even though cars are getting more efficient – and motor tax on newer cars is getting more affordable, the purchase price is still something that puts people off buying a new model.
As a result, available finance is a key decider for many people when looking at a new car, with the PCP (personal contract plan) becoming more and more popular with the Irish motorist.
Renault’s own bank Renault Finance, in the country just over two years, has lent over €100m in retail financing in Ireland to its 6,000 customers.
In 2013, Renault Finance saw approximately one-in-four customers take Renault ReFlex, Renault’s PCP product, which reduces a monthly payment versus a personal loan or traditional hire purchase. Customers can save up to 30% less with the same finance amount over the same period with a PCP.
Early indicators in 2014 show that 40% of Renault and Dacia customers will take a Renault ReFlex product (PCP). ReFlex customers are guaranteed the value of their car in two to three years’ time and Renault or Dacia will guarantee a minimum amount at the end of their finance term.
They also have the possibility of driving a new car every two to three years and if the customer doesn’t wish to keep the car after the term, they don’t have to.
Another reason why PCPs are increasing in popularity is that the deposit required is low, usually 10% between deposit and trade in.
With the market up 45%, Renault Finance has seen an increase of 100% in finance applications for the same period last year. A new maximum two- hour decision time has also been introduced on all finance applications.
Tips for Motor Finance
• Compare the monthly payments of a personal loan, hire purchase and personal contract plan option over the same term and with the same finance amount
• Compare interest rates, check the interest rate you are paying and always review the cost to borrow the money over the term
• Hire purchase is a form of secured lending. Secured loans will typically have a lower interest rate than an unsecured loan.
Hire purchase agreements always have a fixed interest rate. This means your rate will not fluctuate, so your monthly payments will remain the same throughout the term of the agreement
• Your trade-in can be used as a down payment on your finance agreement.